Rokach v. Rokach: Effect of Retirement on a Spousal Support Order
Rokach v. Rokach addresses the issue of terminating spousal support when the paying spouse retires. The parties in this case were married for 21 years and divorced for over 26 years. The pair was 43 at the time of separation and are now nearly 72. Mr. Rokach has paid spousal support to his ex-wife for over 28 years. Pursuant to a court order made by Justice Wilson, Mr. Rokach has been paying 33.3% of his line 150 income as well as 33.3% of any tax benefit he received from an early retirement package, which is not reflected in his line 150 income. Spousal support was ordered to compensate for the fact that, early in their marriage, Ms. Rokach worked part-time while Mr. Rokach attended university full-time to become an accredited professor.
In exchange for her interest in Mr. Rokach’s pension, Ms. Rokach kept the marital home in her name. The home is now worth approximately $1,200,000 and the mortgage is $285,000. According to Ms. Rokach’s financial statement, her net-worth is close to $1,000,000. She retired from work in 2015 at the age of 68. Due to health reasons, Mr. Rokach intends to retire near the end of 2019 at the age of 72. To this end, he filed a Motion to Change with the court in an effort to terminate his spousal support obligations. In response, Ms. Rokach filed a cross-motion seeking an order to increase her spousal support. Per section 17(7) of the Divorce Act, when a court is asked to modify or terminate spousal support, the court must consider the following:
- any economic advantages or disadvantages to either party arising from the marriage or it’s deterioration;
- any financial consequences to be apportioned between the former spouses arising from the care of any child of the marriage over and above any obligation for the support of such child;
- any economic hardship of either party arising from the breakdown of the marriage; and/or
- the promotion of the economic self-sufficiency of each party within a reasonable period of time.
Since the parties were married for over 20 years, there is no automatic spousal support time limit established by the Spousal Support Advisory Guidelines. However, as held by the Ontario Court of Appeal in Choquette v. Choquette, whether spousal support is characterized as either compensatory or not; the obligation to pay spousal support is not one made in perpetuity unless explicitly agreed to by the parties or ordered by the court. Under a compensatory spousal support order or agreement, the longer the spousal support is paid the more likely the receiving spouse’s compensatory claim has been satisfied. Where the receiving spouse obtains real assets from the pension-holding spouse through the equalization process in exchange for an interest in the pension, the receiving spouse has an obligation to use the assets in an income-producing way and must use them to generate income when the pension-holding spouse retires.
Ms. Rokach argued that she would be unable to carry the cost of maintaining the marital home in the absence of continued spousal support. However, the court found no evidence of economic hardship that would warrant a continuation of spousal support. Neither party has any dependents and Ms. Rokach is free to draw upon the equity in, or sell, her home in order to invest or live off the proceeds. Her choice to not sell or encumber the home is not a reason for Mr. Rokach to continue paying spousal support.
In ordering the termination of spousal support, effective December 2, 2020, it was important for the court to find that Mr. Rokach was not voluntarily retiring in order to avoid his spousal support obligations and of even greater importance was the finding that Ms. Rokach had significant assets of her own which she can use to support herself.
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